China’s property construction collapse has taken new building starts back to levels last seen in 2002, raising fresh questions about the long-term outlook for iron ore and coking coal demand, even as dry bulk owners become increasingly bullish about freight markets.
Research published today by Ursa Shipbrokers reveals that Chinese property starts have fallen by 74% since 2019, from 2.27bn sq m to just 588m sq m last year.
The deterioration is continuing. In the first nine months of 2026, new starts totalled 340m sq m, down 25% year-on-year and almost 80% below the equivalent period in 2019.
Floor space under construction has fallen by 32% since 2021, while completions have declined by approximately 40% from their 2023 levels.
Ursa notes that although construction starts have returned to levels comparable with the early 2000s, the circumstances could scarcely be more different. Back then, China was beginning an extraordinary construction boom following its accession to the World Trade Organization. Today, the market is contracting after six consecutive years of decline.
The implications for dry bulk are significant. Property construction has historically been a major driver of Chinese steel consumption, underpinning imports of iron ore and metallurgical coal.
Yet the weakness has not translated into collapsing capesize demand. Chinese iron ore imports actually increased 4.1% in the first nine months of 2026, reflecting greater reliance on overseas supplies, inventory accumulation and changing trade patterns.
Dionysios Tsilioris, a researcher with Ursa, told Splash today that the historic link between Chinese property starts and capesize earnings has disconnected to a large degree.
“Declining real estate construction is a broader symptom of a changing Chinese economy, particularly post-covid, moving away from one heavily focused on fiscal stimulus and infrastructure towards a more consumer and services-oriented model,” Tsilioris said.
At last week’s Maritime CEO Forum in Monaco, John Michael Radziwill, chairman of CTM, suggested dry bulk was approaching a “generational rate rally”.
Milena Pappas of Star Bulk highlighted the growing importance of Guinea’s bauxite exports and Simandou iron ore production in generating longer voyages.
“This is a tonne-mile story. You’ve just seen the beginning,” argued Lars-Christian Svensen, CEO of Himalaya Shipping and Bruton.
The contrast is striking. China’s traditional construction-led demand engine continues to deteriorate, but longer trading distances and shifting mineral supply chains are helping support freight markets.
Whether those factors can continue offsetting China’s structural property slump is emerging as a central question for capesize owners.
